Waiver of Co-Pay: Courtesy or Actionable False Claim?
It has, for a long time, been a common practice for physicians to waive co-pays, co-insurance and deductibles as a courtesy to their patients. However, the healthcare regulatory scheme in New York has changed drastically over the past years. Physicians must be warned that such practice may now be deemed a form of insurance fraud. Waiver of co-pays, if routine, now places physicians at risk for ptential civil, regulatory and even criminal liability for insurance fraud. According to the American Medical Association, "the waiver of copayments and deductibles and the provision of free services, except in limited situations due to the patient's financial or medical indigence, may be viewed as a viiolation of law or a violation of the physician's participation oagreements with insurance companies." Private and govermantal insurers base their contention that waiver of co-pays and co-insurance is fraudulent practice on an argument that such waivers are improper inducements or kickbacks, used to entice patients to chose one particular provider over another. Further, insurers consider a routine waiver of co-payments a false claim filing because if the physician accepts the insurer's payment less the co-pay as payment in full, then he or she should actually be charging that amount. Therefore, billing the insurance company the full fee including the amount of the co-payment, which physician has no intention of collecting, is actually considered an actionable false claim. While many physicians, reasonably argue that if they abolish the practice of routine waiver of co-pays, they will lose their patients to other providers in the community who do waive. Unfortunately, while possibly true, this business rationale will not help the physician avoid liablity. While generally physicians are strongly advised to avoid the practice of automatic waiver of co-pays, such practice may be acceptable in specific circumstances. Physicians are advised to educate themselves and/or obtain counsel on how to implement the safest and most practical policies, which will serve as protection from any accusation of insurance fraud.